BILL ANALYSIS �
Senate Committee on Labor and Industrial Relations
Ted W. Lieu, Chair
Date of Hearing: April 11, 2012 20011-2012 Regular
Session
Consultant: Alma Perez Fiscal:No
Urgency: No
Bill No: SB 1114
Author: Dutton
As Introduced/Amended: February 17, 2012
SUBJECT
Employment: overtime compensation
KEY ISSUES
Should the Legislature change the current 8 hour workday to a 10
hour workday?
Should the Legislature require the payment of overtime
compensation for work in excess of 10 hours rather than the
current 8 hour requirement?
PURPOSE
To increase what constitutes a day's work from eight to ten
hours in a 40 hour workweek for purposes of overtime
compensation.
ANALYSIS
Existing law, with certain exceptions, defines a day's work as
eight hours of labor. Any additional hours worked in excess of
eight hours in one day, or a 40-hour workweek, must be
compensated with the payment of overtime.
Under existing law, the payment of overtime compensation is as
follows:
� Any work in excess of eight hours in one workday, any
work in excess of 40 hours in any one workweek, and the
first eight hours worked on the seventh day of work in any
one workweek shall be compensated at the rate of no less
than one and one-half times the regular rate of pay for an
employee;
� Any work in excess of 12 hours in one day shall be
compensated at the rate of no less than twice the regular
rate of pay for an employee;
� Any work in excess of eight hours on any seventh day of
a workweek shall be compensated at the rate of no less than
twice the regular rate of pay of an employee.
Existing law provides that the standard requirements for the
payment of overtime compensation do not apply where:
a) An employee submits a written request to make up work
time that would be lost as a result of a personal
obligation of the employee if the make-up time is performed
in the same workweek in which the time was lost.
b) An alternative workweek schedule has been adopted
pursuant to Labor Code Section 511 which allows an employer
to propose an alternative workweek for no longer than 10
hours per day within a 40-hour workweek and, if approved,
the employer is not required to pay overtime compensation.
c) Employees have adopted an alternative workweek schedule
pursuant to a collective bargaining agreement if the
agreement expressly provides for wages, hours of work, and
working conditions of the employees, as specified.
d) An alternative workweek schedule is inapplicable because
the work relates to cases of emergency or the protection of
life or property, to the movement of trains, or to certain
hardship exceptions as specified by the Division of Labor
Standards Enforcement.
In addition, existing law provides that the standard
requirements for overtime compensation do not apply to certain
exempt executive, administrative, and professional employees, as
specified. (Labor Code � 515)
Hearing Date: April 11, 2012 SB 1114
Consultant: Alma Perez Page 2
Senate Committee on Labor and Industrial Relations
This Bill would, until January 1, 2015, establish 10 hours as a
day's work in a 40 hour workweek instead of the current 8 hour
workday. The current overtime compensation requirements would
apply for any work in excess of the 40 hour workweek or a 10
hour workday. After January 1, 2015, the provisions currently
in law (8 hours a day/40 a week) would resume operation.
COMMENTS
1. Need for this bill?
Labor Code �510 which covers the hours constituting a day's
work has been in effect since its enactment in 1937. The
general overtime provisions are that a nonexempt employee 18
years of age or older shall not be employed more than eight
hours in any workday or more than 40 hours in any workweek
unless he or she receives the appropriate overtime
compensation.
Over the past several years, the issue of work beyond the
eight hour day has been the subject of discussion in both
Senate and Assembly Committees. Similar concepts allowing for
work beyond the 8 hours without the obligation to pay overtime
compensation have been introduced every year since 2005. In
the fall of 2011, this Committee held an information hearing
entitled, "Workplace Flexibility and the 21st Century Economy:
A Review of California's Workplace Flexibility Laws and
Regulations," at which both employers and employee
representatives had the opportunity to discuss their views on
current law and any need for improvement. In most cases, the
need for flexibility in the scheduling of workweeks has come
from employers making the argument on behalf of their
businesses and their employees, but much less frequently from
employees themselves articulating their reasoning for wanting
more flexible working hours.
Some employers see an advantage to be gained in increasing the
eight-hour work day to allow for more flexibility to schedule
employees in an efficient manner that helps the employer
Hearing Date: April 11, 2012 SB 1114
Consultant: Alma Perez Page 3
Senate Committee on Labor and Industrial Relations
achieve its business goals without costing the employer more
money. For this purpose, the author has introduced this bill
which would increase the work day to 10 hours without the
obligation on the employer to pay overtime compensation beyond
the current 8 hour requirement.
2. Proponent Arguments :
The author argues that the current provisions that employers
pay overtime if their employees have worked over 8 hours in
one day or 40 in one week have created a blanket requirement
that does not always work for every employee or employer. The
author argues that allowing a work day to be extended to 10
hours would give employees the ability to manage their work
differently or in a way that better suits their other life
obligations. The author argues that this bill would not
require employees to work 10 hour days but would simply allow
this option to employers and employees if they so choose.
According to proponents, California is one of only three
states that require employers to pay daily overtime after 8
hours of work and weekly overtime after 40 hours and argue
that even the two other states allow the employer and employee
to essentially waive the daily 8 hour overtime requirement
through a written agreement. Proponents contend that
California provides no such common sense alternative and has
created a significant disadvantage for employers who are
struggling to compete with the rest of the country. According
to proponents, instead of scheduling employees to work shifts
that meet both the personal needs of the employee, as well as
the business needs of the employer, California employers have
limited flexibility.
Proponents argue that this bill eliminates stringent
requirements and basically places California on the same level
playing field as the rest of the country. By eliminating the
8 hour daily overtime requirement, employers will have more
flexibility to schedule employees in an efficient manner that
helps the employer achieve its business goals without costing
the employer more money.
3. Opponent Arguments :
Hearing Date: April 11, 2012 SB 1114
Consultant: Alma Perez Page 4
Senate Committee on Labor and Industrial Relations
Opponents of the measure argue that the right to an 8 hour day
was won through the determined and courageous efforts of
California's union members. In the 1860s, unionized workers
in every industry formed Eight-Hour Leagues and union by union
they adopted resolutions that, after a certain date, members
would work no more than eight hours in one day. By 1868,
their efforts lead to the first California law establishing
that eight hours constitutes a day's work.
According to opponents, emerging from the Great Depression,
the Federal Labor Standards Act was passed not to prohibit
additional work but to create a premium for it with the goal
of establishing minimum labor standards as well as creating
additional job opportunities, rather than allowing employers
to work existing workers for longer hours. Opponents contend
that the fight for an eight hour day has never ended as it
remains under continual attack. They argue that not only do
attempts to rollback this protection emerge every year, but
they also hear from workers who are routinely forced to work
overtime off the clock. Opponents argue that the eight-hour
day was won by union members who believed that working people
deserved to go home to their families at the end of the day,
rather than work every waking minute of their lives.
Opponents contend that they remain committed to that
principle.
4. Related Legislation :
SB 1115 (Dutton) of 2012: Currently before this Committee
SB 1115 would allow employees -- employed by an employer with
10 or fewer employees -- to request an employee selected
flexible work schedule providing for workdays of up to 10
hours per day without the employer obligation to pay overtime
compensation.
SB 367 (Dutton) of 2011: Failed passage in Senate Labor & IR
Committee
Similar to SB 1115 of this year, SB 367 would have allowed an
employee to request an employee-selected flexible work
schedule providing for workdays up to 10 hours without the
required overtime compensation, however, SB 367 applied to
Hearing Date: April 11, 2012 SB 1114
Consultant: Alma Perez Page 5
Senate Committee on Labor and Industrial Relations
employers with 25 or fewer employees.
AB 830 (Olsen) of 2011: Failed passage in Assembly Committee
on Labor and Employment
AB 830 would have allowed an individual nonexempt employee to
request an employee-selected flexible work schedule providing
for workdays up to 10 hours per day within a 40-hour workweek
without the obligation to pay overtime compensation for those
additional hours in a workday.
SB 1335 (Cox and Dutton) of 2010: Failed passage in Senate
Labor & IR Committee
AB 830 was identical to SB 1335, which also failed passage in
its first policy committee.
SBX8 66 (Cox) of 2010 was identical SB 1335 (Cox and Dutton)
of 2010. SB 187 (Benoit) of 2009, AB 2127 (Benoit) of 2008,
AB 510 (Benoit) of 2007, AB 2217 (Villines) of 2006, SB 1254
(Ackerman) of 2006, and AB 640 (Tran) of 2005 were essentially
identical or very similar to this bill. All of these bills
failed passage in their first policy committee.
SUPPORT
Associated Builders and Contractors of California
California Association of Bed & Breakfast Inns
California Chamber of Commerce
Associated Builders and Contractors of California
California Association of Bed & Breakfast Inns
California Chamber of Commerce
California Chapter of the American Fence Association
California Fence Contractors' Association
California Framing Contractors Association
California Grocers Association
California Hospital Association
California Hotel & Lodging Association
California Independent Grocers Association
California Landscape Contractors Association
California League of Food Processors
California Manufacturers and Technology Association
California Newspaper Publishers Association
Hearing Date: April 11, 2012 SB 1114
Consultant: Alma Perez Page 6
Senate Committee on Labor and Industrial Relations
California Restaurant Association
California Retailers Association
Engineering Contractors' Association
Flasher Barricade Association
Marin Builders Association
National Federation of Independent Business
Plumbing-Heating-Cooling Contractors Association of California
Western Electrical Contractors Association Inc.
OPPOSITION
California Conference Board of the Amalgamated Transit Union
California Employment Lawyers Association
California Labor Federation
California Nurses Association
California Professional Firefighters
California Rural Legal Assistance Foundation
California State Association of Electrical Workers
California State Pipe Trades Council
California Teamsters Public Affairs Council
Engineers and Scientists of California
International Longshore & Warehouse Union
Professional & Technical Engineers, Local 21
UNITE HERE
United Food and Commercial Workers Union, Western States Council
Utility Workers Union of America, Local 132
Western States Council of Sheet Metal Workers
Hearing Date: April 11, 2012 SB 1114
Consultant: Alma Perez Page 7
Senate Committee on Labor and Industrial Relations